Created on a hill called Babelsberg along the banks of the Havel River, the 124 hectare, landscaped park was commissioned by Prince William and his wife Augusta.It was originally laid out by Peter Joseph Lenné in 1833 and was redesigned by Prince von Pückler-Muskau in 1842-67. Terraces with mosaics, ornamental flowerbeds, sculpture and fountains are grouped around the Babelsberg Palace. The terraces are connected to a pleasure ground with the Golden Rose Garden, to a round flowerbed at the Gothic Fountain, and to flower arrangements enclosed by colorful clay bricks. Walking paths offer scenic views of the Havel lakes and the Potsdam city skyline, which led to the construction of the Flatow Tower from 1853-56. The park has been protected by historic preservation since the 1960s. After the fall of the Berlin Wall, the area along the water to the north was restored and integrated into the park.

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